How Does a Competitive Exchange Differ from a Two-Person Model

question 63

Multiple Choice

How does a competitive exchange differ from a two-person model of exchange?

• A)The Pareto criterion is satisfied only in a competitive exchange and not in a two-person exchange.
• B)In two-person exchanges,the exact outcome of bargaining cannot be predicted unlike with a competitive exchange.
• C)The outcomes of two-person exchanges tend to be more equitable than competitive exchanges.
• D)In two-person exchanges consumers are price-takers while competitive exchange involves price-makers.

---

Definitions:

Nucor's Profit-Sharing Program

A compensation scheme implemented by the steel company Nucor, designed to share a portion of profits with employees, thereby aligning their interests with the success of the company.

Steel Produced

The quantity of steel that has been manufactured and processed from raw materials.

Skill-Based Pay Programs

Compensation systems that pay employees based on their skills, expertise, and the variety of tasks they can perform, rather than their job title or position.

Job-Related Skills

Specific skills and capabilities that enhance an individual’s performance in their current or future employment roles.